Media captionGeorge Entwistle: "The BBC must stand at the heart of creative endeavour"

The BBC's new director general George Entwistle has said he will put programme makers and "outstanding creative originality" at the heart of the organisation.

In his first speech to staff since starting in the post on Monday, he said he felt "privileged" to lead the broadcaster.

But Mr Entwistle acknowledged criticism of the BBC and said "we can do better".

He revealed plans to change management as part of a "radical simplification".

Mr Entwistle announced that chief operating officer Caroline Thomson, who was a rival for the top job, would leave the BBC at the end of September.

The finance and operations divisions will then be merged into one business division.

"I intend to change the way we're led to put the emphasis where it belongs - on creative people doing creative things; on our audiences and the exceptional quality of work they deserve," he told staff.

Mr Entwistle said his focus on creativity could not be isolated from the BBC's financial challenges, with cuts of 16% already planned as part of the Delivering Quality First initiative.

Analysis

By Torin DouglasMedia correspondent

George Entwistle wrote his first letter of complaint to the BBC at the age of 6 - when Tom and Jerry was replaced by the Budget.

Now he is tackling some of the BBC's more entrenched problems, such as too much bureaucracy and too few women presenters. He's slimming the management structure - closing the operations division and halving the size of the management board.

Creative people will be given more charge of their own destiny. If they save money, they will be allowed to keep some of it for their own programmes.

And within two years, there'll be further integration of radio, television and digital media, inspired by the success of the Olympics coverage which had seen the BBC working more closely together.

He told the Radio Times he'd also like to see more women's sport on the BBC - and more women presenters and experts.

He said he intended to involve front-line programme makers and content producers in making those savings, with the incentive that they would be able to put the money back into their output.

Mr Entwistle paid tribute to the BBC's Olympic coverage and said staff should aspire to recreate that atmosphere with other projects.

"Only the BBC can do things with the ambition, scale and quality that bring the whole nation together," he said.

Mr Entwistle also acknowledged problems within the structure of the BBC, including "internal competition, the duplication, the jockeying for position".

He continued: "And at its worst, the leaking, the briefing against other people and other departments - and the sheer waste of energy and money that results."

He told staff he hoped to lead the BBC in a way that "re-invokes the pride I believe we all felt on our first day".

Licence settlement

The next licence fee settlement will be a key issue for Mr Entwistle, with negotiations on the future cost of a TV licence due to start in 2015-16.

Appearing on the Andrew Marr show on Sunday, outgoing director general Mark Thompson said he believed the corporation should not face further budget cuts, as it was "getting very, very close to the edge".

However, looking ahead, Mr Entwistle said only one thing could guarantee the corporation's survival: "Creative output of such outstanding quality that the British licence fee payer simply refuses to do without the BBC."

He continued that the organisation could not argue for a renewed licence fee in 2017 unless output was of the "highest quality and our audiences love us for it".

Mr Entwistle, who was previously director of the BBC's Vision department, has worked at the corporation for almost 23 years.

In his first interview, with this week's Radio Times, he revealed his passion for the BBC had started early.

As an outraged six-year-old, he wrote a handwritten letter to the "Derector of the BBC" after Tom and Jerry was bumped off the schedule because coverage of the 1969 budget overran.